Updated from 4:20 p.m.

Chiron

(CHIR) - Get Report

posted a weak first quarter and guided toward a slightly soft 2005 earnings performance.

Chiron also warned that it wasn't aiming to make a full year's run of its key flu vaccine. Shares of the company, which has been hard hit since Fluvirin got yanked last fall on manufacturing safety concerns, fell 5% in late action Wednesday.

The Emeryville, Calif., biotech firm lost $8.9 million, or a nickel a share, on revenue of $407 million in the quarter ended March 31. That reverses the year-ago continuing operations profit of $27 million, or 14 cents a share.

Excluding certain costs, latest-quarter earnings were 4 cents a share. That falls substantially short of the Thomson First Call analyst estimate, which called for a 17-cent profit on sales of $410 million.

The company said it expects to make $1.45 a share or so on a pro forma continuing operations basis for all of 2005, a shade below the $1.48 estimate. Revenue will be in line with estimates at around $2 billion.

"We are pleased with the progress we have made towards supplying flu vaccine to the United States for the upcoming season," said CEO Howard Pien. "While there are still hurdles ahead, we currently project that we have the capacity to produce 25 to 30 million doses of Fluvirin vaccine, and our discussion with the distribution network provides us with reassurance that there is a solid demand for our currently projected production. We are grateful for the guidance we have received from the regulatory agencies as we continue with our remediation with vigor and commitment."

Chiron also warned that it was aiming to make just 25 million-30 million doses of Fluvirin, compared to the more than 50 million doses it produced last year. After the company failed plant inspections at its Liverpool facility last fall and lost its manufacturing license, the U.S. was left with only half the supply of flu vaccines it was expecting. The company says it has worked with British regulators and the U.S. Food and Drug Administration to improving its manufacturing processes and has since been approved by the Brits to resume production.

Chiron is banking on FDA approval in the next few months and says it has lined up distributors to buy all the doses it can produce for the 2005-2006 flu season. The FDA was an observer in three out of five inspections by Britain's Medicines and Healthcare Products Regulatory Agency, and the company expects one or two FDA inspections in June or July. Chiron is preparing to ship the vaccine in September.

Late Wednesday, Chiron slipped $1.68 to $32.75.